Her comments suggested America won't be increasing interest rates again any time soon, which is seen as a key indictor of the health of the world economy.

Michael Hewson, chief market Analyst at CMC Markets UK, said: "It was fairly clear that the Federal Reserve is concerned that the current market volatility could blow the US economy off course.

"[Ms Yellen's] comments that “financial conditions in the United States have become less supportive of growth” were a nod to the slowdown in China, the appreciation of the US dollar, and weaker oil prices. "

World Economic Forum meeting in Davos

Thu, January 22, 2015

World Economic Forum (WEF) annual meeting in Davos Jan. 21-24. World leaders including France's Francois Hollande, Germany's Angela Merkel and China's Li Keqiang will gather at the annual Davos forum, seeking to chart a path away from fundamentalism towards solidarity. The world's political and business elite gather in the glitzy Swiss ski resort with the shadow of recent attacks in France and ongoing global conflicts looming large.